The GST reforms will infuse ₹2 lakh into the Indian economy, Union Finance Minister Nirmala Sitharaman said on Wednesday. That effectively means more cash in hand for people in the world's most populous country.
“With this new gen tax regime, with only two slabs (5% and 18%), ₹2 lakh crore is injected into the economy. People will have cash in hand,” the finance minister said during an event in Visakhapatnam on Wednesday. India Inc. is now voluntarily coming forward and passing on the full benefits of GST rate cuts to consumers, even before 22 September — the date when GST reforms come into effect, she said.
On 4 September 2025, the GST Council led by Sitharaman reduced levies on hundreds of items—from soaps to small cars—and rationalised the structure to just two slabs (5% and 18%) from four (5%, 12%, 18% and 28%) in India's biggest indirect tax reform since goods and services tax first came into effect on 1 July 2025.
As a consequence, 99% of goods under the 12% GST slab have moved to 5% and 90% of items under the 28% slab are now in the 18% tax bracket.
{{/usCountry}}As a consequence, 99% of goods under the 12% GST slab have moved to 5% and 90% of items under the 28% slab are now in the 18% tax bracket.
{{/usCountry}}According to the finance minister, the Narendra Modi government saw the GST reforms through five filters: how it benefits the poor, whether it fulfils aspirations of the middle class, what's in it for farmers, and how MSMEs can make the most of it to create jobs and increase exports.
India's GST revenue grew to ₹22.08 lakh crore in FY25 from ₹7.19 lakh crore in FY18, she said, even as the GST base expanded to 1.51 crore from 65 lakh earlier.